bb upside call buying i bought the stock. >> okay. >> disney. i expect the knock-on effect from what i was talking about with paramount. >> it's been fun really fun i hope all of you have a great, long weekend that does it for us on "the halftime report. i'll see you in a couple hours at 3:00 today and 4:00 "the exchange" is now. 150. >> thank you i'm kelly evans. ahead on "the exchange" a key inflation coming in hot, not as hot as last month. now everyone is talking about whether inflation is peaking and the fed will be slowing down our guest says that's the wrong conversation to have speaking of slowing down, with gas prices through the roof are lower speed limits a way to limit demand we will look for real solutions to bring prices down and it's been a wild week for retail, so which names are buys and which are now bails? it's all coming up this hour

over to dom chu with our market numbers. >> so kelly, that retail trade obviously a huge one from the last couple weeks but we have to focus on technology because it is in many ways the most important sector in the entire market right now and as you can see behind me from a sector perspective, also what's leading the gains today. arguably have been all week. now if you look at the bigger picture numbers, the dow industrials now 352 points higher, near the highs of the session. the s&p 500, 4129, up about 1.75%. 2.5% gains for the composite index. at this point the dow industrials are -- have gotten back all the losses in the month of may the s&p 500 is literally just 2 points, 2 points, away from becoming flat for the month of may. the composite has about a 300 point gain to get flat for the month. very solid over the last week. within that technology trade i just mentioned, there are some areas in particular that have been getting more attention from

traders and investors, thinking about either buying the dip or covering some of those money-making short positions they've had. it has been in semiconductors, up 7% so far this week software, up 5.5 to 6%, 6% gains for the beaten up financial technology names, we're talking block, paypal, those stocks. generally speaking the etfs showing big gains within that kind of technology sector. then, of course, you have to pay attention to the mega cap stocks the apples and microsofts, the alphabets of the world three in particular have done a lot of heavy lifting for the market gains within the s&p and the nasdaq apple up 8% over the last week microsoft up nearly 8% 13% gains for tesla. those stocks have done a lot of movement here. we'll see whether or not there's some at least stability. by the way, those stocks, kelly, apple and microsoft, are up roughly 10 to 12% off their lows that we've seen this last run and tesla, up 20% from the lows

over the last month. >> monster move. all right. dom, thank you very much we appreciate it dominic chu. my next guest has been warning the fed has to stay vigilant against inflation so expectations don't become unanchored let's see what data is telling us first of all, some very good news on areas that had gotten overheated the manheim used car index plunged below 9 from above 54 this time last year. definitely some good news, helping ease inflationary pressures. the report the fed watches pce came in at 6.3% this morning, down from 6.6% last month. the core reading fell back below 5% goes in the middle because the levels are super high and high energy prices are perhaps the most visible sign of pain. consumer sentiment dropping again today, sliding another point to 58. that's a fresh 10-year low most importantly, inflation expectations they are still subbornly high. still at 5.3% for the year ahead

versus 5.4% last month on that note, let's bring in my next guest, randy crosser in, deputy dean and a former fed governor, great to have you here today. do you think the fed can ease up here >> i think the fed has to continue on the path that it's going on and going to continue on that path i think they understood inflation is likely coming down before they fully get the interest rate rises out there, but they can't stop because if they stop, then inflation expectations continue to move up and inflation becomes entrenched and much more difficult to get it out. >> sounds like they might slow down, though whether it's the minutes or the commentary from officials, the idea that they're going to keep hiking by a half a point after the next couple meetings looks like it's already out the window. >> it's the next couple meetings that's baked into the cake so that gets them in to, you know, at least the next two, maybe

three meetings that gets them into the 2% range. then i think they're going to assess to see how inflation is a volatile, how the economy is volatile the economy has taken tough shots from the war, sanctions, and i think a waning impact of that -- all that money that went into people's pockets from the stimulus checks, they're spending it down and at some point they'll have to -- they've got to get the money from somewhere and that will be spent out. they won't -- the consumer may not be as robust. >> on just the basic level, though, does the fed at least need to get to neutral is there any reason why they should be below a level that might conservatively be 2% neutral, i don't know if 3 or 4%, and they suggest they want to go higher, but for anybody who is suggesting they slow down this year, that puts them well below those levels. >> sure. so i think the fed estimates neutrals are around 2.5. it's somewhere between 2 and 3,

most people would say, hard to know exactly where it is, and that's why i think once they get around 2 they're going to sit back and assess where things are. but i think they've got to get to neutral given how high inflation is and given that we still have such a low unemployment rate, do we really need to have the fed being extremely stimulative? i think neutral seems perfectly reasonable. >> yeah. i think maybe one of the sources of confusion has been this post-pan shift from goods back to services, so we see used car prices falling, we hope that inflation is peaking but it doesn't mean that we're going to see it completely go away strong labor market, services inflation, that's expected to look luke over the next 12 months or so >> sure. one of the examples we've seen in the last month is airline prices up 18, 20%. people want go on vacation it's first time they've been able to do so in a very long time travel is up enormously. people want to do a lot more services kinds of consumption.

they couldn't get out and they bought goods and everything delivered to home. now they want to get out and there will be a lot of pressure in those areas it's not like inflation is going to come back to 2% hopefully it won't get much higher than it has been over the last few months and it will gradually at least come back down, but it's not like it's going to be like that. >> how how do you think the risk is of the 1970s with the stagflation nary outcome, where we have inflation, it doesn't cure high prices, goes on for a decade, takes a long time to get in front of it >> one of the things that i think the fed has gotten in front of, they're starting to act before inflation expectations become unanchored the short front of expectations are high, but if you look at the longer run numbers from the survey based measures as well as the market-based measures looking at inflation protected securities, versus noninflation pro tejtsed security, the longer run numbers are in the range of where they've been over five or

ten years. that's why if the fed agent now, it doesn't risk the inflation expectations becoming unanchored if they sit back and say things are getting better, let's not worry too much, you worry this gets baked into wage demands, gets baked into how firms will be pricing and then you get into the 1970s. by acting quicker now we can avoid the 70s. a high chance if they do follow through the next few meetings of 50 basis points rate hike. >> we will leave it there. have a great weekend and thanks for your time. >> you too bye-bye. >> my next guest says the market is having all the wrong conversations about inflation right now, and he has the names he thinks will continue to perform well in this environment. joining me is charlie, the vice chair and head of the investment group at ariel investments great to see you, charlie. what is your reaction to the

inflation versus recession debate going on with vigor right now? >> first of all, after seeing "top gun" i'm no longer responding to charlie, call me by my call sign name, value man. >> true to your stock picks, putting your ticket money where your investments are. >> absolutely. a spectacular movie that's going to be a home run for paramount this year. the point is, on inflation, what you have to do is not just say what you think, you have to compare what you think, to what the market thinks. the professor said the market is baking in a pretty quick return to 2 to 3% inflation that is what's baked into bond prices and how we get a 27510275 ten-year, that is classic anchoring. where we had low inflation for a long period of time and people

are not adjusting to the new data enough. in fact, we are going to have high inflation, well above the 2% target certainly for this year, and well into next year and then after that, we're going to have to see because the fed is still quantitative easing with interest rates below neutral we have a fed fund rate less than 1% in a 6% inflationary environment that's crazy, there's still a lot of stimulus going on and we think we're going to have inflation above normal levels. >> are they still easing they've started qt or that starts next month or we have to be close >> yeah. but kelly, they have gone for -- you and i talking about inflation for more than 18 months and they were still buying $120 billion of bonds every month adding $120 billion of cash to the economy every month. even after it clearly we had an inflation problem. they finally stopped that. and now they're going to start modest quantitative tightening

with modest interest rate increases that are behind the curve. they're still clinging to the pce inflation data which is their preferred number because it's the lowest number they exclude food and energy because those are the most inflationary factors an they tell us, inflation is only 4%. it's not 4%. it's closer to 7%. >> i think the real issue, charlie, again reading the bernanke book that came out last week is a good reminder, throughout the '70s, early on, there was a sense of well, you know, the economy might slow down or better ways of dealing with inflation or that oil price shock is different and, you know, oh, our tools aren't the right tools to use for this, and i'm hearing a lot of same talk today. >> very good i'm glad you read up on the '70s because there are a lot of comparison and one of the other comparison is a massive increase in the supply of money m-2 is a relatively broad definition of money that includes money market certificates, and money market

accounts that measure of the money supply is up 42%, 42% from february of 2020 that kind of massive increase in the money supply has to lead to inflation and it is. >> this is a really important point, though, because the market has woken up to m-2 but what it's looking at now are measures of change and not overall levels they're saying m-2 has crashed back to whatever it is, 5% year on year growth or clearly headed to zero, maybe negative, so they -- from that, determine that means the fed needs to respond to that change,that th tightening is baked in, that they perhaps need to switch to easing now because a recession is coming and all the rest of it what's the mistake there >> because if the -- there's always a lag is the short answer to your question when the money supply explodes higher, you don't get the price increases right away there's a lag. some people estimates 6 months, some 18 months th that 40% increase we got at the

beginning of covid hasn't gone away we haven't brought down the money supply we've only moderated the growth. think about it, if mcdonald's does a stock split, two for one, the price of a mcdonald's share goes down by almost exactly 50%. if they put out more stock the next day, the price doesn't go back up. it goes down a little bit slower maybe, but just because the m-2 growth is moderating, doesn't unwind the 42% that we got over the last two years. >> someone like you, could end up with the same conclusions as jeremy grantham has drawn which makes him bearish, sees the valuation reset by 50% or more are you more constructive, certainly you are on individual names? >> yeah. this is where we are always very quick to say that you can't talk about the stock market because there are lots of different kinds of stocks. the kinds of stocks that will get hit hardest if we're right where inflation stays higher, the tech stocks, the stocks

trading at high multiples because higher discount rates hit tech and growth stocks much harder than value stocks value stocks are pricing in some inflation and then a recession we think the chance of a recession is up from where it was, but still less than 50% so if we get a world of pretty high inflation, but a reasonable economy, our value stocks are going to continue to do well because they're being priced at very attractive levels. >> apa corp, an energy name, mosaic, fertilizer materials play, mohawk, berg warner, one final question for investors who are concerned about political interference with energy right now which looks like it's going to be pretty high risk going into the summer and into the mid term season would that hurt your skmt performance of your energy investments? >> that's a great question boris johnson said things about surplus taxes on oil and gas profits. i think at this point people are not -- people know we have

shortages in oil and gas and i don't think they're going to do anything that's going to curtail exploration. but clearly political risk is absolutely an issue with these names longer term. right now apache is trading at five times earnings. it's a great value here, but there is political risk. >> where do you think oil prices are going? >> i'm going to say they're going to moderate. the forward price is about $65 a barrel two years out put me down as above that, but probably below today's 110 so put me in the 90 to 100 range. apache makes a lot of money. >> 90 to 100 everybody would feel wealthier i think at least consumers more generally. this has been a pleasure thank you for your time today. >> thank you remember, it's value man, not charlie. >> i'm sure. value man. charlie with ariel investments coming up, this group of stocks is said to snap a four month losing streak and outperforming the broader market despite a

deluge of dismal data. we'll tell you what it is next and what could drive it from here. our big name brands in big trouble and do off pricing have big power? a big week of retail earnings comes to a close as we head to break here's your check on markets another day of green across the board. coming off an eight-week losing streak with a decidedly positive winning one. the dow up 1%, the s&p up nearly 2% the nasdaq up 2.5% we're back after this. e chgen is thexan o cnbc.

welcome back to "the exchange." despite the sharp slowing in housing sales home builders have actually outperformed the s&p 500 this month my next guest has been bullish on the builders and isn't giving up hope yet. joining me is steven, a home builder analyst at evercorp isi. great to see you again why do you think the past month, because rates especially in the last week or so have stopped rising >> i would say that probably the most important reason is that housing has slowed a little, but not nearly enough for the bear case to be proven out and, in fact, when the builders all reported, you know, a few weeks ago, all the analysts pretty much had to take their estimates

off across the board if you look at the estimate revisions, you know, they're up and to the right and in addition, book values continue to grow when stocks are trading at or below book value if that book value keeps going up, it pulls the stocks up with them. >> what are two or three takeaways from what the builders reported that you think investors need to be mindful of? >> it's the number one thing is that they are continuing to raise price because the market dictates it. the prices are up in the existing market, which sets pricing for the whole industry, pricing up about 1% a month in that in the existing home market homes are continuing to sell above asking routinely, which is unusual obviously. and the builders are not incentivizing. they haven't had to increase their incentives to coax buyers in because the demand is still out pacing the supply.

that's probably the most important thing. >> do you think home prices are going to drop? >> i think home price growth will slow. i do not think you will see home prices drop measurably in this year that has been the crux of our thesis because our point that we made a month ago was that the building -- the builder stocks were pricing in about a 20% drop in home prices over the next couple years we are absolutely resolute that will not happen. >> why don't you think that won't happen it might be bad news for people trying to get into the market? >> the number one reason is because when you -- the main reason you get home prices to go down, is you have forced selling. which is what you had in the gfc, in the mid to late 2000s. people who could not afford the homes they were already owning because they shouldn't have been able to buy them in the first place, using adjustable rate mortgages and other mortgage products they could not afford

the homes they owned that does not happen today in fact, if you look today, the average person who has a mortgage has a rate of about 3.4% incredibly low rate and that rate is fixed. 95% of the mortgages out there are fixed. and so basically, their payments are not going up when demand gets a little shaky, when things soften, they stay put. they don't go out and sell their home in the gfc they were forced to sell their home because they could not afford the home they were opening. >> the only way i can understand this group trading at a five times earnings is if earnings are about to fall. is that still mathematically possible this year or next year? >> well, i mean, if youlisten to somebody who is concerned that home prices are going to go down a bunch, sure i suppose. it won't happen for at least two quarters, though, because the builders have presold backlogs they're working on trying to construct.

for the next six months you're going to continue to see largely what you've been seeing, no matter what really but, yeah, i mean i think that as i said, the disagreement right now in these stocks and the bears i would say largely are dominating the conversation, is that home prices are going to go down and i would just tell you that if you had told anybody six months ago that mortgage rates would have shot up 220, 240 basis points, they would have expected -- anybody would have expected that you would see more weakness today than you do. you should already be seeing weakening. you should be seeing incentivizing by builders. see people getting, you know, having to take action to bring more customers in the door that is not what you are seeing. >> i believe you're overweight on the entire space, but do you have a favorite or two and is there anyone you're under weight on and less bullish on >> i think right now, the big call in the space is to get the industry right i think the fundamentals are going to be what's going to drive things and frankly, right

now, the group is being painted with a broad brush there are no individual builders that are being carved out and saying oh, we like this one when people think home prices are going to drop they don't like any of them. i don't think home prices are going to drop. i'm not seeing evidence of like that i like all of them i think that frankly, there's not one that i would particularly call out. they're so unbelievably cheap. they are way cheaper than five times earnings the street on top of everything else has been way too low on their system on my numbers a lot of these builders are trading at three times earnings or less >> wow. >> and the street has been coming up to our estimates consistently over the last year and a half >> i really -- it's crazy to watch. i haven't seen multiples like this outside of crisis events in any industry in anything in recent memory. that's what makes it fascinating to talk to you about thanks for your time today. >> thanks for having me. >> steven kim with evercore isi.

>> crude oil is on pace for its six straight month of gains. drivers shouldn't expect relief soon we'll tell you why with wti under $115 a barrel. if you're hunting for yield these days you may be looking at stocks in the wrong country. which global names are out performing and why and as we head to break here's a look at the dow heat map. green on your screen only one name in the red. it's coke. i think. back in a moment jpmorgan top performer up 11%, on pace for its best week in nearly two years. ♪ ♪ the lower your drag coefficient, the more efficient you become. such amazingly perfect shapes run throughout the natural world. and can now be found in the automotive one. the world's most aerodynamic production vehicle. the eqs sedan.

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welcome brack to the markets. here's a look at shares of tesla up 6%. one of the many bright spots in the market today the dow up 338 points, s&p up 70, nasdaq up 300. s&p and nasdaq about to snap a seven-week losing streak dow snapping its eight-week decline. let's take a look at some of the movers this hour with tesla trying to make it three days in a row higher after a brutal stretch for the stock. credit suisse reiterating its bullish stance on the company saying the decline is an attractive entry point tesla at 750, up 6% and up 13% this week. ken coinbase up 14%. cowan initiating the stock with an outperform and 85 target. the name down 70% this year and just below $74 a share today the airlines, big one to watch here taking off again today as we head into the holiday travel weekend. every stock in the sector is up more than 4% delta 2.5%

hawaiian up 7% today this group has been, again, an area of relative out performance. the cloud computing stocks are seeing some nice gains the etf tracking the sector on pace for the third day in a row of gains and first positive week in six infusion, crowd strike are among your winners to tyler for a cnbc news update. >> kelly, thank you very much. amid growing criticism of local police in uvalde for not trying to immediately storm the classroom where the 18-year-old shooter was barricaded a top texas state official acknowledges those officers should have acted sooner >> on the benefit of hindsight where i'm sitting now, of course it was not the right decision. it was the wrong decision. there's no excuse for that i wasn't there, but i'm telling you from what we know, we believe there should have been an entry as soon as you can. >> greece accusing iran of violently seizing two oil

tankers in the persian gulf. it appears to be retaliation for the seizure of this iranian tanker in greek waters for alleged sanctions violations and president trump's attempt to stop new york state's investigation of his company has been denied by a federal judge who rejected the argument that it is entirely driven by political animosity. tonight on the news with shepherd smith a cnbc investigation into how thieves are stealing digital land in the metaverse. back to you. >> i will see you soon thank you very much. coming up, does retail make your head hurt our trader has three retail picks she says will continue to benefit from reopening, regardless of higher inflation we'll go shopping with gina sanchez. during may, we're celebrating asian-american and pacific islander heritage. here is founder sal. >> my message to my kids and

everyone in their generation is, own your heritage, but also own your american. the most american thing you can do is bring your culture and help it become part of the broader american culture i'm unabashedly american exceptionalist is this country perfect? no but i do think it has given more diverse folks more important than ever before and i think it's, you know, more on a erheex bte becoming evenetr ov t nt few generations.

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i could use whenyour expertise.pen, we're on the verge of extinction. let's all try to stay positive. welcome back we've seen huge differentiation in the retail names lately from the dollar store surging to gap and ab crom by getting hit and ulta on the upswing. what did we learn and the best trades in the sector now here with three buys and a bail, is gina sanchez. welcome. it's great to see you. your first buy is ulta beauty, the stock soaring after reporting that record first quarter, raising its guidance, the ceo says double digit sales growth across all major categories the stock only back to flat on the year. >> ulta, flat on the year is not bad for this year, kelly, so

let's keep that in mind. but, you know, beauty right now is one of those places actually not just a strong spot for ulta directly, but you heard it in the target earnings call as well, that that was one of the bright spots there, even though they had a hard quarter. this is an area with masks on, beauty products are back on, so everybody is going out and buying what's interesting is that they're not -- because of inflation, you would have expected people might have traded down, but they're not they're actually staying with the prestige products which have a higher margin and great for ulta. >> it was one of oliver chen's big picks when we talked to him for many of the same reasons you cite how did they manage to expand their profit margins to 40% from under 39% at a time when there's so much price pressure everywhere. >> ulta benefitted from timing of luck. they say if you can't be smart you would rather be lucky.

they actually plowed in an enormous amount of investment into their supply chain, going into 2018, so as the pandemic hit, they had just finished up a massive overhaul of their supply chain, of their inventory management and they pumped up their e-commerce game. you couldn't have caught that timing better in order to survive the pandemic and now they're benefitting while a lot of people are still figuring out supply chain issues. >> not that you were going to give a price target, but what's your sense here of the kind of runway it now has to run >> i think the pent up demand story is there we see consumption there and, you know, the interesting thing about the consumer discretionary sector broadly in retail it has had the worst revisions in terms of eps expectations and the market has thrown out the baby with the bath water. we think ulta got thrown out and really still has significantly more room to run and the story line is these are not expensive

products these are products that you can afford at the end of the day, if you have pent up demand there is this could continue to get earnings and at the profit margins they're running it will be an interesting buy. >> all right let's move on to talk about your next pick, tjx, parent company of t.j. maxx and beat on profit margins but cut same-store sales forecast and missed on comps why is this a buy? >> this is an interesting one. they are forecasting that as gas prices remain high, oil prices and inflation kind of really hits everyone, they're basically saying apparel is first thing that goes out in terms of things that you're willing to spend your excess money on if you're worried about filling the gas tank or buying groceries t.j. maxx in that scenario will benefit relative to the rest of the world. these off price brands, marshals and t.j. maxx, the two stores that they own, you can also see this in other opportunities like

kohl's but these are stores that, you know, we think will benefit from people really thinking hard about what they want to buy and how much they want to spend on it. >> your third pick, bath and body works a name we talk about a little bit less often lowered their full year guidance, investing in technology, maybe not the first thing you think of for a bath and body works and they do keep emphasizing the supply chain is 85% divested. >> they announced they were making this investment into their technology and infrastructure and they got hit because it's going to hurt their earnings for a period of time. however, that will examine back and also this is one of those, again, very affordable price points, as we get to socialize again, smelling good turns out is a thing we want to have we think that that pent up demand, again, benefits this level of purchase and that these investments, although they're

getting hit right now, they're going to recoup those. >> a strong pandemic name if they are a benefit, that would be quite a feat. those are your three buys, ulta, tjx, bath and body works your bail, surprised me, best buy. it's had a tough stretch, reported an 8% drop in same-store sales, cut the outlook, the stock up 15% this weekend. a lot of people had been preferring anything with scale as investments versus smaller, more marginal players. tell me why this one for you is a bail >> this one was -- you're right, that yes, they have definitely had a bounce, but the thing is, they also got pummeled i think some of that bounce really comes from just relief out of that. and the story line here is that while we think that people will buy makeup and we think that people will buy cheaper clothing and, you know, beauty products to make them smell good, we don't think if inflation lang out, people will make large

scale electronic purchases we see that as something that's probably going to continue to come under pressure especially if you assume that inflation is here for a while and so we just think that that large scale purchase is not on the agenda. >> all right gina, never disappoint, thank you so much. we appreciate it. >> thank you so much >> gina sanchez with three buys and a bail. >> a look at the emerging markets posting gains in may and whether there's more room to run. before we head to break, we show you the chart and tell the story. booking holdings on pace for its best week since mid march after the stock fell 30% in less than a month. the ceo of its priceline unit joined "squawk box" for his prediction of the summer travel season >> flight prices are running 40% up over 2021, so year over year, and consumers appear to be willing to pay the prices which

have seen flight capacity running close to record high, even though there are seats available, down 10%. with that pressure on the inventory you're going to sea e busy airports not just for memorial day but throughout the summer.

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making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity. welcome back u.s. markets have gotten walloped but one area of the world is seeing big gains. seema moody is here with the emerging markets that are now out performing >> kelly, investors are looking around the world and betting that inflation has peaked in brazil where interest rates are already above 12% among the highest in the world and with six months until a presidential election jpmorgan writes there is political pressure on the ground to curb prices the widely traded shares ewz is on pace for its best week since late march up less than 1% emerging markets broadly gaining about a percent helped by the

notable weakness we have seen in the u.s. dollar. the biden administration will host a number of leaders in los angeles as the u.s. attempts to counter china's influence in broader latin america, first lady biden returning to washington after a six-day tour to ecuador, panama, costa rica to get leaders to attend and investors will be on the lookout for any trade deals. >> i wonder, we could talk about which markets in latin america in particular are expected to out perform and just how much of this is month by month change versus persistent out performance driven by fundamentals >> yeah. the macro story has played a role in the out performance of latin america. everything from the big moves in commodities, not just oil but natural gas among others, latin america this is a beneficiary of higher commodity prices. that has been the main catalyst

behind the move in the latin american etfs and brazil the biggest beneficiary of higher oil prices reuters surveyed 15 strategists who say from here until the end of 2022, mexico will be a market that will out perform a bit more because it's a bit -- seen as more of a stable play given the near term volatility we could see in brazil because of the upcoming presidential election. >> wow is mexico perceived as a good return for investors these days? >> again, it is a trade off of higher oil prices. that's what it's seen as yeah, again, they don't have that political near term uncertainty that brazil does have right now. >> absolutely. it's always -- a lot of opportunity and a lot of risk. that's how you get the returns in the emerging markets. seema, thank you very much seema mody. up next, a tiny bit of relief for drivers ahead of memorial day weekend at least gasoline prices aren't climbing but oil is seeing some upward moves again today the very latest numbers and what

could be done to lower prices. i think if you're a fast driver you might not like it. right now, we're all feelin' the squeeze. we're having to get creative. find a new way. but birthdays still happen. fridays still call for s'mores. you have to make magic, and you're figuring out how to do that. what you don't have to figure out is where to shop. because while you're getting creative, walmart is doing what we always do. keeping prices low for you every day. so you can save money and live better. ♪

welcome back just in time for the big travel weekend, today marks the first time in 16 days that gasoline prices didn't set a new high the national average holding steady at $4.60 a gallon and that's still $1.50 than a year ago. oil sitting near record highs after crude jumped to nearly $115 a barrel, the highest level since may 18 what can be done to bring down prices yesterday bank of america's francisco blanch suggested people might want to consider driving slower politicians might consider lowering speed limits. joining me with his take is andy lipout, oil associate's president. how likely do you think a move like that would be and snav te -- and save in terms of demand? >> it's little we saw decades going to a 55-mile-an-hour speed limit probably savings 2 to 3% on

mileage, but these days with more efficient cars, that benefit is going to be far less than we have seen in the past days of gas guzzlers. >> are we talking maybe a 1% demand savings something in that range? >> yeah. maybe something like that, which is only equivalent to something like that which is equivalent from 90 to 100 barrels a day which is in the scheme of the consumer using 9 million barrels a day. >> i've seen reports that we're starting to see a slowdown in gasoline demand. what are you picking up in the data >> we certainly see it on the fringes where they're combining the trips to the grocery stores, other errands and the market what happens this summer as americans take to the road for their vacation. >> is there any sign, we've talked to other analysts about this, but gasoline prices are higher than normal compared to the oil price and that is because of refinery shortages

and is there any relief in sight where at least gasoline prices can fall a teensy bit relative to what the price of oil is today? >> i think today's decline is going to be short lived because we've seen both crude oil and gasoline prices rally over the last week, i'm expecting that over the memorial day weekend, gasoline prices are going to rise 5 cents a gallon, but as far as getting more refinery capacity online quickly, that's simply just not the case here in the u.s. we will be utilizing more capacity as we end the spring seasonal maintenance period over the next week and it is not likely that we'll be restarting the refineries that have been shut over the last couple of years. >> one of the scary features of what's going on right now is because demand is outstripping supply and because we're releasing barrels, we're driving down increases here, and are you worried about these levels >> yeah.

it is a big concern because gasoline inventories at the lowest level since 2014 and the strategic petroleum reserve inventory is at its lowest level since september of 1987. these are only buying us some time, but the real key is how do you get more energy on the consumer to make up the deficit that we're seeing from the sanctions that have been imposed on russia. >> and do you have answers to how we would do that >> well, there are some answers and they're all long term. you need to have a combination of drilling for more oil where the environmentalists don't want to do that or creating more renewable fuels which is still some years away and getting into the debate of food versus fuel or you can have price be the ultimate arbiter in rationing of supplies as the price goes up you ultimately get enough demand destruction to get us in balance, but the ultimate

solutions are several years away and you can even see that in the actions that are being taken over in europe as far as natural gas and building lng facilities and infrastructure and that's a three or four-year process >> so do you expect the price to peak this summer and then fall back toward something more normal over the next year or two or what's your feel for it these days >> well, that's an excellent question because it really depends on how these sanctions with russia play out and if additional quantities of russian oil are taken off the market we don't get additional supplies e especially asking opec to open the taps to make up for their shortfall from the production quotas or if we don't get additional supplies out of iran and venezuela by easing sanctions which is also unlikely i'm afraid that what we're really going it see for the rest of the year is higher energy prices through the summer and

going into the winter. >> you know, one quirky sidenote, i heard side-view mirrors have hurt efficiency do you think regulators would say we have technology that didn't exist, maybe the side-view mirror goes a wi >> i think that would be getting down into the weeds of doing things when there are bigger fish to fry than worrying about the side-view mirrors on cars. >> i think you're right, but we're sort of grasping at straws here andy, thanks for your time today. andy lipow crypto investors might be bracing for a bumpy ride and why they don't get a holiday that's ahead and just in time to navigate volatility, cnbc's crypto night in america is back. tonight at 6:00 p.m. eastern

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>> welcome back, everybody bitcoin just above their 20,000 and above this month and if history is any indication long weekends are not so friendly for crypto investors kate rooney is here to brace us. kate >> kell, that's right. crypto never sleeps, as you know it will be one of the few asset classes trading while u.s. markets are closed for memorial day and that's mainly because of a lack of liquidity meaning there are fewer people out there to trade so you see a handful of larger trades, those could trigger outside spikes in another direction. the data found crypto trading volumes tend to fall off a cliff as they put it on major u.s. holidays july 4th sees the biggest

decline and then christmas and then labor day are pretty much tie. there is actually more trading on january 1st and the it underlines how widely adopted bitcoin is in the u.s. fund strat found bitcoin tends to perform better during the trading hours and that wasn't a year ago, for example, when the asset class was a lot bigger than asia. another factor that could be added to volatility and measured by the bitcoin leveraged ratio which has been climbing since february and it is now at an all-time high and if bitcoin were to move sharply it could catch the highly leveraged investors and compound to move in either direction. on top of that, kelly, bitcoin is very much tied to the macro outlook which is still looking pretty tough for the riskier assets >> i'm shocked that now is when leverage was at a high >> it's interesting. it's been slowly, slowly adding and we're back at a new all-time

high it's interesting it does seem to suggest that traders are looking for either protection or looking to bet on the direction of bitcoin versus holding it as a bet itself, but it's back. we'll see what happens monday. >> buckle up, everybody. while that volatility may not be a good thing for bitcoin and the recent sell-off has presented some strong opportunities and the names she's snapping up in "power lunch tyler? ♪ ♪ thank you, kelly welcome, everybody, to "power lunch. i'm tyler matheson here's what's ahead this hour as we wrap up this week stocks powering higher, showing inflation has risen just a bit helping to boost sentiment has the fed done enough to cool the economy? that's the debate and we'll discuss this hour. veus, it's not too late to